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China's rise fraught with hope, fear

BEIJING—If Japan's development was fast, and South Korea's was even faster, then China's rise is the fastest.

China on Tuesday reported that its economy is much bigger when its share of the growing services sector is estimated more accurately. As a result, China replaced Italy as the world's sixth-largest economy. It's No. 4—behind only the United States, Japan and Germany—if Hong Kong's figures are added.

In barely three decades, China has thrown up endless high-rises, shopping malls and highways. It's sending astronauts into space, building a powerful military and filling store shelves worldwide with low-priced manufactured goods. Starting in 2007, Chinese-made cars may hit U.S. showrooms.

The Chinese feel great optimism, even as other nations temper their admiration of the rising dragon with some measure of fear.

Never before in modern times has a huge nation risen in global stature so quickly and peacefully. China's appetite for raw materials has revved up economies as far away as Africa, Oceania and South America.

In a six-month series of 17 stories, Knight Ridder has examined the implications of this extraordinary economic boom for Chinese and for Americans, who make up its largest export market.

Growth has lifted living standards in China. The pedal-to-the-metal development, however, has brought environmental calamities and widespread disregard for workers' rights and safety. Strict political control has thwarted freedom. Communist Party leaders neutered the Internet with sophisticated filters and directed social anger, when possible, at outside targets, particularly Japan.

Many fault lines lie under modern China. Unrest breaks out in small protests around the nation. The ruling party can claim legitimacy only with sustained economic growth. Leaders fret that rising inequalities, social injustices and rampant corruption could trigger broader strife, their greatest fear.

Time and again, China says that its rise will be peaceful. Yet its military is sharpening its teeth, preparing for a number of military contingencies, not just a military conquest of Taiwan, the democratic island off its shores that China claims is part of it.

The overriding sensation in modern China, however, is one of pride and hope for the future on the crest of a 28-year wave of rapid economic growth.

"The majority of Chinese—those under 45—have never known a time when the economy, the standard of living, was not doubling every seven to 10 years," said James M. Brock, an energy consultant in Beijing and a longtime resident of China.

China has 383 million mobile phone subscribers, more than any other country in the world. Even poor rural farmers commonly have cell phones and color televisions. Some 110 million of China's 1.3 billion people regularly surf the Internet, even if many sites on sensitive subjects are blocked.

Some 69 percent of Chinese expect that five years from now they'll stand on the top rungs of the "ladder of life," a measure of quality of life. That's an increase of 14 points since 2002, a Pew Global Attitudes Project survey released in November found.

High expectations put a huge burden on China's leaders, who pledge to quadruple the standard of living by 2020 and bring a well-off life to the citizenry.

Despite widespread corruption in the lower ranks of the ruling party, China's senior leaders are a skilled lot, experienced China watchers say.

"I'd be willing to put up the top 20 leaders in China any day against their counterparts in the U.S. in terms of competence," said Richard Baum, a China scholar at the University of California in Los Angeles who's teaching for a semester in Beijing.

Still, China's political system is brittle and filled with contradictions. Party leaders exalt the founder of modern China, Mao Zedong, even as they practice capitalism, which was anathema to Mao. Lower-level officials, inept at dealing with unrest, often use force or lie.

When an explosion ripped through a chemical plant in Jilin province on Nov. 13, dumping 100 tons of toxic benzene into the Songhua River, officials shut off the city water in the metropolis of Harbin, citing routine maintenance. For more than a week, they lied to city residents about why their drinking water had been shut off.

Protests are increasing. While Chinese, especially in cities, are generally optimistic, the populace has many local grievances, ranging from corruption to land grabs and abuse of authority. The number of protests shot up from 10,000 in 1994 to "more than 74,000" last year, involving 3.76 million people, according to Public Security Minister Zhou Yongkang.

Officials race to keep a lid on unrest, aware of Mao's famous saying on sudden social upheaval: "A spark from heaven can set the whole plain ablaze."

To quell uprisings, authorities don't hesitate to use brutality. When villagers in coastal Dongzhou in Guangdong province in the far south rose up on Dec. 5-6 against a proposed power plant, paramilitary police opened fire, killing between three and 20 people. Discussion of the event was largely purged from the Internet in China.

Even as Chinese leaders feel insecure about domestic problems, they're handling diplomacy deftly. Their message: China's rise will be peaceful.

"We neither have the time, energy nor the need to threaten anyone or any country," Zheng Bijian, a close adviser to the leadership, said in a speech on Nov. 3.

China's regional ambitions, however, were on display this month at the inaugural East Asia summit in Malaysia, a coming-out party of sorts for China. The United States wasn't invited.

Washington is concerned about not letting China sideline it in East Asia, yet Sino-U.S. relations are arguably better than they've ever been, even as the U.S. trade deficit with China climbs close to a record $200 billion this year.

President Bush, visiting China in November, described Sino-U.S. relations as candid, cooperative and constructive but added a fourth "C," saying they were also complex.

A complicated trade relationship is one example. As many U.S. companies complain bitterly about piracy of products, others report growing profits and investments.

U.S. fast-food giant KFC is the most popular casual dining spot in China with 1,500 outlets, Motorola has $3.6 billion in investments in China, and Intel has finished a huge chip assembly plant in Chengdu.

That kind of complexity also permeates what may become a key source of contention between the United States and China: the need for secure energy supplies.

The two nations are the world's No. 1 and 2 consumers of energy, and their foreign policies increasingly clash as oil companies from both nations hunt for oil rights in Central Asia, Africa, the Middle East and Latin America.

China depends even more on coal, much of it supplied domestically. Through Dec. 11, 5,491 coal miners have died in 2,939 mining accidents this year. The central government routinely asserts that it's adopting "extraordinary measures" to shut down unsafe mines. Some analysts say repeated mine disasters underscore the weakness—and even inability—of party leaders to enforce laws and halt provincial corruption.

"The leadership lacks authority," said Yang Fan, an economics professor and party member who's deeply critical of what he describes as weakness in Beijing. "The collusion between local officials and coal mine owners is too strong. Many officials hold shares in the mines."

Some analysts juxtapose that perceived weakness with the desires of a population that's becoming savvier about individual rights as people scour for better products and information.

"You're getting a much more knowledgeable citizen with more access to information who want more out of life and are beginning to understand their legal rights," said Baum, the UCLA professor. "And that's putting great stresses on the system."

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(c) 2005, Knight Ridder/Tribune Information Services.

GRAPHIC (from KRT Graphics, 202-383-6064): 20051220 China growth

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